There can be many reasons why insiders might sell their own company's stock: a big personal purchase like a house; cash to fund a charity; and many other reasons.
Whichever the case is, insiders usually buy shares because they think the stock is a bargain and has upside potential. When mutual funds or hedge fund managers (and even everyday investors) see a lot of insider activity, it most definitely triggers a reason to take a second look at the company. Recently, the 4 companies below have seen heavy insider buying.
Cracker Barrel Old Country Store, Inc. (CBRL) is principally engaged in the operation and development of the Cracker Barrel Old Country Store restaurant and retail concept (Cracker Barrel). The current market price is $52.50, and the stock offers a1.94% dividend yield. CBRL has a market cap of 1.20B and an enterprise value of $1.74B. The current EPS is $3.63 and for fiscal year 2012, analysts estimate that CBRL will earn $4.30. For the 1st quarter of fiscal year 2012, CBRL announced earnings per share of $1.03, representing 24% of the total annual estimate. For fiscal year 2013, analysts estimate that CBRL's earnings per share will grow by 9% to $4.68. Cracker Barrel’s 52-week range is between $37.31 and $54.98. The 10, 21, 50 and 200 day moving averages are all up showing a bullish upward trend. Also, perhaps the best news is the fact that an insider reported to have bought shares on three separate occasions; 160,000 shares at $50.96, 60,000 shares at $51.36, and 65,000 shares at $51.91 amounting to a total of $14,610,478.
Synta Pharmaceuticals Corp. (SNTA) is a biopharmaceutical company focused on discovering, developing, and commercializing small molecule drugs to extend and improve the lives of patients with medical conditions. The Company has 3 clinical-stage drug candidates and several drug candidates in the preclinical and discovery stages. The current market price is $4.54 with a one-year analyst price target of $7.33. This represents a 61.45% upside potential. SNTA has a market cap of $224.33M and an enterprise value of only $178.12M. The fact that this is a start-up pharmaceutical company a substantial amount of risk is inherited, but the risk-reward must be evaluated. Currently Synta Pharmaceuticals has $50.66M in cash on its books and only $16.80M in debt. Although current EPS is $1.09, analysts estimate that SNTA's earnings per share will grow by 6% in 2012. Moving Average Convergence/Divergence (MACD) indicates a Bullish Trend, and the 21 and 50 day moving averages do as well. The best news in regards to this company is the fact that Bruce Kovner, a director, just bought 1,136,363 shares at $4.40, amounting to nearly $5M.
VMware, Inc. (VMW) is a provider of virtualization solutions from the desktop to the data center. The company's suite of virtualization solutions addresses a range of complex information technology (IT) problems, that include cost and operational inefficiencies, facilitating access to cloud computing capacity, business continuity, software lifecycle management, and corporate computing device management. The current market price is $87.92 with a one-year analyst price target of $107.11. This represents a 21.83% upside potential. This company has $3.98B in cash and total debt amounting to only $450.00M. VMW’s 52-week range is between $74.04 and $111.43. VMW was recently upgraded by Oppenheimer from perform to outperform. Current EPS is $1.49, and analysts estimate that VMW’s earnings per share will grow by 68% to $2.51 by 2012. The best news in regards to VMware is the fact that an insider reported to have bought shares on two separate occasions; 71,900 shares at $83.35 and 47,700 shares at $84.08 amounting to a total of almost $6 million.
Vical Incorporated (VICL) researches and develops biopharmaceutical products based on its deoxyribonucleic acid (DNA) delivery technologies for the prevention and treatment of serious or life-threatening diseases. The current market price is $3.76 with a one-year analyst price target of $6.60. This represents a 75.53% upside potential. This company is in good shape due in part to its $52.63M in cash on its books and no debt. VICL has performed exceptionally well in the biotech group for the prior year. The stock was up over 120% in part to its positive developments in its pipeline and its lead product Allovectin being tested in phase 3 trials. VICL's current quarter consensus estimate has increased by 3.3%, while consensus estimates for the Generic & Specialty Pharmaceutical Industry have dropped an average -1.0% during the same time period. The 52-week price range for Vical is $1.70 - $5.30. Perhaps the best news in regards to VICL is the fact that James R Singer, an insider, just bought 2,666,667 shares at $3.75 amounting to $10 million.